Finding the right debt solution is never easy. Since everyone has a unique financial situation, there is no one-size-fits-all solution for managing debts. This makes it difficult for people to know which solution would best fit their needs. In general, there are a few things to consider before deciding on a debt settlement or credit negotiation option.
Where you are in the delinquency process has a lot to do with which option may be best. If you have yet to miss a payment, but are beginning to experience financial pressure, credit card negotiations could be a good solution. The reason is that creditors are often more willing to negotiate before you muss a payment. Missed or late payments signal you as a credit risk and may imply that you are not responsible in maintaining your agreement.
If you have already missed several payments or have been late more than once in making your payment, you may want to consider a debt settlement option. When you have missed a payment, time becomes crucial for your financial future. In order to protect your credit, making a move quickly is the best strategy. Therefore, creditors may be willing to settle or less than is owed if they think your next option may be bankruptcy.
Your financial situation is also a key aspect of determining which solution is best for you. If you can afford to repay your debts with a modified payment schedule, lower interest rate or reduced monthly payment, credit negotiations may be a good solution. In many cases, people have been able to save their credit and regain control over their debts by simply negotiating small changes to the terms of their account. If your financial hardships are preventing you from maintaining payments and you don’t anticipate that minor changes to your account will be manageable, debt settlement may be your best option. Settling your debts for less than is owed should provide a more drastic reduction in your monthly payment requirement.